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2017 | OriginalPaper | Chapter

17. A Note on Information, Trade and Common Knowledge

Authors : Leonidas C. Koutsougeras, Nicholas C. Yannelis

Published in: Sunspots and Non-Linear Dynamics

Publisher: Springer International Publishing

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Abstract

We recast the well known no trade result in Milgrom and Stokey (1982) using the appropriate definition of efficiency among several available in the asymmetric information framework.

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Footnotes
1
Koutsougeras and Yannelis (1995) introduce refinements such as the strong-coarse and weak-fine information efficiency.
 
2
We have considered for simplicity the same prior for all agents, but different priors can be easily accommodated.
 
3
As a matter of notation, the event \(\mathcal {F}_{i}(\omega )\) is understood to be the smallest one in \(\mathcal {F}_{i}\) containing the state \(\omega \). In fact, \(\mathcal {F}_{i}(\omega )\) is the element in the partition that generates \(\mathcal {F}_{i}\) containing \(\omega \).
 
4
A possible interpretation of this formulation is that contracted allocations are executed after preferences and endowments have materialized.
 
Literature
go back to reference Koutsougeras, L., & Yannelis, N. C. (1995). Incentive compatibility and information superiority of the core of an economy with differential information. Economic Theory, 3, 195–216.CrossRef Koutsougeras, L., & Yannelis, N. C. (1995). Incentive compatibility and information superiority of the core of an economy with differential information. Economic Theory, 3, 195–216.CrossRef
go back to reference Milgrom, P., & Stokey, N. (1982). Information, trade and common knowledge. Journal of Economic Theory, 26(1), 17–27.CrossRef Milgrom, P., & Stokey, N. (1982). Information, trade and common knowledge. Journal of Economic Theory, 26(1), 17–27.CrossRef
go back to reference Yannelis, N. C. (1991). The core of an economy with differential information. Economic Theory, 1, 183–198.CrossRef Yannelis, N. C. (1991). The core of an economy with differential information. Economic Theory, 1, 183–198.CrossRef
Metadata
Title
A Note on Information, Trade and Common Knowledge
Authors
Leonidas C. Koutsougeras
Nicholas C. Yannelis
Copyright Year
2017
DOI
https://doi.org/10.1007/978-3-319-44076-7_17